People born in early Eighties were around half as wealthy at age 30 as their counterparts who were born in the Seventies, analysis shows.
The children of the “Baby Boomer” generation, currently in their early 30s, have an average net household wealth of £27,000 each a report by the Institute for Fiscal Studies, a think tank showed.
By comparison the median wealth of those born in the 1970s had £53,000 on average by the same age. The figure takes into account housing, financial and private pension wealth.
Experts said their comparatively lower ability to build wealth is down to a combination of lower home-ownership rates in early adulthood, less access to generous final salary-type pension schemes, and stagnant wages since the financial crisis.
People born in the early Eighties have significantly lower home-ownership rates in early adulthood than any generation for half a century, it found. At the age of 30, only 40pc of those born in the early 1980s were owner-occupiers, compared to at least 55pc of the 1940s, 1950s, 1960s and 1970s cohorts.
In their late Twenties, renters born in the early 1980s spent nearly 30pc of their net income on housing costs (largely rents) on average, compared to 15pc for homeowners (largely mortgage interest).
At the same age, renters and homeowners born in the 1960s both spent around 20pc of their income on housing costs on average.
Hence, the decline in homeownership has been accompanied by a divergence in the costs paid by renters and homeowners.
Ashley Seager, co-founder of the Inter-generational Foundation, said: “We are not at all surprised by these findings. Britain has for decades seen widening inequality between the young and the old. Britain needs radical action on housing, pensions, student debt and a host of other issues to prevent young people being totally ripped off.”
Andrew Hood, an author of the report and a research economist at the IFS said: “By the time they hit their early 30s, those born in the early 1980s had about half as much wealth as those born in the 1970s did at the same age. Sharp falls in home-ownership rates and in access to generous company pension schemes, alongside historically low interest rates, will make it much harder for today’s young adults to build up wealth in future than it was for previous generations.”
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